Updated over 4 years ago on . Most recent reply
Improvements for a better appraisal
A new investor in San Diego and I recently bought a triplex and did some renovations. Looking to get it appraised for a refinance but am looking for tips for the appraisal. I have redone the kitchens and roof but haven't had time to address the landscaping. Currently, there is just patchy grass in the front with no fence. Would it be worth it to get the landscaping done before the appraisal so that it will appraise for a higher amount? Is there another addition that could be more worthwhile? Thanks in advance for the tips.
Most Popular Reply
Having had many appraisal, including 8 in the last two months, it is my opinion it is little more than a crap shoot on how the appraiser will value the property.
In my market, I know the prices and have seen most of the comps. I can tell with great accuracy which duplex to quad will get offers immediately at or over list and which will not. Basically, I am much more knowledgeable about the price and the comps than the appraiser. It is also my view that refi appraisals are often conservative, so I take this into account when I am setting my refi appraisal expectations.
Of the last 8 properties the ones done in the last 2months), there was one that in my view had no comparables. That one, I had a huge price range from $640k to $860k. It came in at $740k. Competent appraiser that I believe factored in some risks. The other 7 properties, I had narrow expectation ranges like $30k range. One came in higher than my range, 4 came in the range I was expecting. 2 were pathetically low and by the same appraiser. One of the comps used on my two duplexes was a garage conversion ADU that had a $50k disclosed foundation issue (I had been in both the units multiple times). The other comps were literally the other lowest comp choices possible and one was older (10 months) and two were across town. I appealed and they sat on the appeal until the day before loan closure then rejected. If this happens again I will pull the loan. The appraiser indicated there was no note of a disclosed foundation issue in the mls notes on the ADU (as though it was too difficult to call either agent involved in the transaction).
An RE investor who heard about the appraisal offered to buy both properties at their appraised price. I am sure he would as they both appraised ~$50k below the low end of my range expectation.
I wish I could say he was the worst appraiser I have dealt with, but I have had one probably worse that literally fled town before the appeal on the 2nd property. You know what happens if they disappear? You are screwed on the current loan. The first appeal I got a $60k upper which still had it below the low end of my range.
If you were planning on improving the landscaping, there is no reason not to do it before the appraisal. However, you will never know if it helped the appraised value.
good luck